The Supreme Court dealt hedge funds and other big investors a blow Tuesday by refusing to revive core parts of lawsuits that challenged the federal government’s capture of billions of dollars in profits generated by Fannie Mae and Freddie Mac.
The House Financial Services Committee chairman is calling out Fannie Mae and Freddie Mac's regulator for authorizing payments to two housing trust funds while the mortgage giants have their own financial struggles.
Freddie Mac posted a fourth-quarter net loss of $3.3 billion and will request $312 million from the Treasury after recent tax reform legislation forced it to write down the value of deferred tax assets.
Tax reform caused Fannie Mae to burn through retained earnings that had been approved just two months ago and to post a fourth-quarter loss. CEO Timothy Mayopoulos argued it was a one-time event that overshadowed strong fundamentals.
Craig Phillips, a top aide to Treasury Secretary Steven Mnuchin, said his department "broadly" agrees with the FHFA plan, which would return Fannie Mae and Freddie Mac to the private market and provide them an explicit government guarantee.